High Hopes

By Louis Jacobson

July 1, 1999

ompared with the popular image of public housing-dank, boarded-up high-rises in depopulated, crime-ridden, inner-city neighborhoods-the Osage Hills development in Tulsa, Okla., hardly looks so terrible. Located on what used to be Indian land, Osage Hills' low-rise buildings seem to roll across the Oklahoma prairie. Bustling downtown Tulsa looms nearby on the horizon; fresh air and green space abound. The development even borders middle-class homes and a golf course.

But below the surface, Osage Hills has major problems. Its World War II-era structures are aging fast. Few retail outlets are located nearby. And for years the housing development suffered from rising crime. In other words, Osage Hills experienced many of the ills that other Housing and Urban Development Department properties did throughout the 1970s and 1980s.

But now HUD is trying to improve projects like Osage Hills-and in the process upgrade its own image. HUD Secretary Henry Cisneros and his successor Andrew Cuomo have promised wider autonomy to local housing authorities in exchange for stricter performance standards. They also have engineered takeovers of housing authority bureaucracies and sought to rationalize the agency's own ranks in Washington.

For Osage Hills, HUD's most dramatic initiative is a $550 million-a-year project called HOPE VI, which seeks not only to rebuild and revitalize the worst developments in HUD's portfolio but also to attract a more economically diverse mix of residents. HUD has initiated a carrot-and-stick approach: Welfare recipients will be given access to programs designed to make them self-sufficient, but drug dealers and other criminals will be ousted with little mercy. With HOPE VI projects like Osage Hills, says HUD spokesman Stan Vosper, "we want you not to think that this is public housing."

In Tulsa, the first stages of HOPE VI are just now under way. Though the effort has run into several significant political roadblocks, residents applaud HUD and the local Tulsa Housing Authority for improving its record in recent years. And many outside observers look confidently to the future. "Change is never easy," says Brookings Institution fellow and former HUD chief of staff Bruce Katz. "But I am struck by the general enthusiasm surrounding HOPE VI-the sense that something can be built, literally from the rubble, that has staying power."

HUD's Hope

The roots of HOPE VI lie in the massive failure of public housing in the 1970s and 1980s. "There was a feeling that probably about a tenth of the public housing inventory was highly distressed," says Katz. "That tenth was built poorly, in isolated places-often literally across the railroad tracks. There was a heavy concentration of poverty, especially among African-Americans, sometimes with 85 to 90 percent of a given development on welfare. No one was working, in neighborhoods with no jobs, where crime was high. What was called for was a fundamental overhaul."

Ironically, experts concluded, this raft of problems owed much to the most humane of policies: using government power to help the neediest citizens. With limited space and money in the federal budget-and with America's homeless population growing-HUD under Presidents Carter, Reagan and Bush gave public housing preferences to the poorest Americans. But, Katz says, "when you concentrate people on welfare in a dense development in a poor neighborhood, you exacerbate the problem. The problem, we eventually realized, is that the issue was not about housing alone, it was about neighborhoods."

Some reformers, such as Bush administration HUD Secretary Jack Kemp, favored promoting home ownership through the privatization of housing projects-letting residents buy their units cheaply to instill in them the sense of responsibility that comes with ownership. Some of Kemp's efforts bore fruit, but many did not, and the next generation of HUD experts concluded that privatization was doomed because the poorest residents simply could not afford the upkeep necessary to maintain high-quality developments.

Instead, HUD turned to other reforms, especially the long-ignored notions of neighborhood, work and self-improvement. The department consulted with architects and city planners to determine how to make public housing more attractive and livable and better connected to jobs and surrounding neighborhoods. Smaller, scattered, low-rise developments suddenly came into vogue. In addition, officials sought to end the warehousing of the poorest residents by eliminating preferences based on income or other factors, such as past service in the military.

Under the new thinking, people who lived in public housing would be granted both new rights and new responsibilities. Criminals and drug dealers would be tossed out on the street and security patrols would be enhanced. At the same time, welfare recipients would be provided with the tools to escape economic deprivation, and working-class residents would be lured to live in the developments, where they might serve as role models for neighbors seeking to emerge from welfare. No one, it was hoped, would stay in public housing longer than they needed to; the mantra among housing officials was "up and out."

With these underpinnings, the HOPE VI program was born in 1992, shortly before Bill Clinton was elected. With a noticeable degree of bipartisanship, Congress passed legislation and appropriated $300 million for the initiative. After Clinton took office, the money for HOPE VI stabilized at roughly $500 million annually, most of it to fund the demolition and redevelopment of existing public-housing units.

Along with HOPE VI came other changes at HUD. The agency began getting tough with local housing authorities, whose governing boards are appointed by local political leaders but which use federal funds from HUD to run public housing developments. HUD offered housing authorities more freedom to run their affairs, thus helping reduce bureaucratic inertia, but also demanded that performance goals be met-with dire consequences, such as receivership, for failure.

At the same time, HUD sought alternatives to the traditional notion of public housing. Even HUD spokesman Vosper admits that "HUD has not always been the best landlord in the world. We've pretty much stopped the old-style developments cold turkey." HUD accomplished this with a twofold reform: The department eliminated a rule requiring no net loss of housing units, and it focused increasingly on vouchers that subsidized private-sector housing. In addition to using resources more efficiently, these changes appealed to members of the new conservative majority in Congress, who hated spending money for old-style public housing projects.

Indeed, though some members of Congress continue to call for HUD's elimination, the agency has bought itself some crucial time with its bold moves. And by having a Democratic administration enact the changes, HUD was able to dampen the criticism emanating from low-income-housing advocates on the political left. "For Cisneros and Cuomo, these changes were like Nixon going to China," Katz says.

White Elephant

There's no question that HOPE VI has been a popular program. Nationally, it has funded 104 projects-a tiny fraction of all the applications submitted. And HUD officials say that for every federal dollar spent in the most recent round of HOPE VI grants, the department has been able to leverage $2.20 in private-sector funds, foundation money and unrelated tax credits.

"The beauty of HOPE VI projects is that each of them is unique," says Vosper. "Communities determine that they have a problem with distressed housing and realize they need something to bring it back to life. Then they get all interested parties together."

When Cuomo visited Osage Hills last year to announce the awarding of its HOPE VI grant, Janet Wilson, the secretary-treasurer of the Osage Hills Residents' Association, recalls a feeling bordering on exhilaration. "I think we really felt it at the press conference," she says. "The Tulsa Housing Authority saved seats for us in the front row. I think even [THA executive director Roy Hancock] said that day, 'This is for you guys.'"

Osage Hills sits within the most economically and racially diverse quadrant in Tulsa. It is the oldest of the city's 17 public housing properties. "This site has the most outstanding physical needs, period," says Jon Klinghagen, HOPE VI program director for the THA. Before HOPE VI funded the demolition of 101 units, Osage Hills contained 388 homes, one-third of which were for elderly and disabled residents.

The quality of the surrounding neighborhood has fluctuated over time-prosperous at times, down on its luck at others. Even today, there are enormous differences in affluence from one block to another. But there's no question that the beginning of the oil bust in the early 1990s helped push Osage Hills and its vulnerable residents into the danger zone. Crime rose, residents found work harder to come by, and conditions within the housing development worsened.

In the early years of the Clinton administration, however, things began to get better-even before local officials applied for the HOPE VI grant. Under new leadership, the THA improved its services dramatically. Ruth Nelson, a local phi- lanthropist, took the chairmanship of the authority and-with HUD's blessing-hired new, more competent management for its properties, including current executive director Hancock. Residents praise the new managers for finally fixing long-standing problems, from improperly locked stairwells to insect infestations.

HUD is banking on HOPE VI's keeping that momentum going. At Osage Hills, HUD will spend $28.6 million-not including $34.3 million in leveraged private investment and tax credits-to demolish 388 units and construct 485 homes designed in a neo-traditional architectural style. Some will be built on lots in the stable, middle-class neighborhoods nearby.

Prospective residents will be subject to thorough background checks before moving in, and residents who receive public welfare will be required to participate in a "self-sufficiency" program. Officials hope welfare recipients will be encouraged to move off the rolls by the presence of lower-income, working families living elsewhere in the development. "What THA did," says James Colgan, a senior community builder in HUD's Tulsa office, "all ties in together with a movement HUD had under Cisneros and Cuomo-a get-tough policy to have safe and decent places for people to live, where people have opportunities to improve their lives. It all moves together in tandem."

Over the next four to five years, new community facilities will be built, such as a recreation center and-with any luck-retail stores, to ease the present shortage of accessible shops. "Right now, stores are sorely lacking, even to the point where I can be safe in saying they're almost nonexistent," says THA board member Reuben Gant. "All you have to do is take a drive through the community-there's an absence of restaurants, clothing stores, shopping centers and grocery stores."

Gant sees the HOPE VI effort as crucial to the drive to revive north Tulsa. "One of the things we have done very well over the last few years is to target low- and moderate-income individuals for entree into the day-care business," he says. "We have helped to put five individuals into the business, some of whom were welfare recipients who got on a positive track toward self-sufficiency."

All told, HOPE VI and its potential for triggering a domino effect is "empowering the community to take pride back into their neighborhood," says William Tisdale, the manager of minority business development with the Metropolitan Tulsa Chamber of Commerce. "Pride is probably the No. 1 thing to ensure that a project will remain successful. And it's something that has not existed here in a while."

The Value of Vouchers

Not everybody is sold on the HOPE VI concept. Some critics say HUD would be better off using the $28 million it put into the program to fund vouchers for residents to find housing on their own. Ironically, dispersing residents of public housing widely rather than confining housing projects to isolated areas was once a radical notion espoused by liberals; now it's been appropriated by Rep. Tom Coburn, a Tulsa-area Republican who is one of the most socially conservative members of the House.

After the Tulsa World editorialized in favor of the HOPE VI redevelopment last year, Coburn issued a press release harshly critical of the idea. "I am concerned that pumping more money into a housing concept that has been a monumental failure across the nation will only trap poor people into a continuing cycle of despair," Coburn said in the release. "For $100,000-the cost of each Osage Hills unit-a resident could buy almost three existing homes in the urban renewal area near the project, or almost any single home almost anywhere in Tulsa."

In an interview in Tulsa, Karl Ahlgren, a Coburn aide, added that moving Osage Hills residents into private homes would help the local tax base, because HUD-owned properties are not taxable. "We have adequate housing available for families who have been displaced by economic reasons or other factors," Ahlgren said.

Housing specialists in both Tulsa and Washington say Coburn and other critics are right about the value of vouchers-but wrong to suggest that they are a panacea. HUD officials say they aren't opposed to vouchers-in fact, the department has aggressively backed an expansion of vouchers nationally. Vouchers are available to those with 80 percent or less of an area's median income; a recipient would pay 30 percent of his or her adjusted gross income, with HUD picking up the difference.

"We want to do as much as we can with vouchers because it gives people a variety of options, but there will always be a percentage of the low-income population that is not able to take care of their own needs-seniors, people with severe disabilities," says HUD's Vosper.

In addition to arguing for vouchers, Coburn decried the fact that Israel Roizman, the developer who partnered on the Osage Hills HOPE VI application with THA, asked for a 15 percent fee-reportedly twice the going rate. Moreover, the fact that Roizman's company was based in Pennsylvania, rather than in Oklahoma, and that he was alleged to have a cozy relationship with the Democratic Party and HUD rankled Coburn.

By this spring, THA had bumped Roizman from the project. But even before that, another Oklahoma Republican in Congress, Tulsa-area Rep. Steve Largent, decided to side with the Clinton administration rather than with Coburn on the HOPE VI issue.

"The bottom line is that the money was already there," says a source familiar with the issue. "Somebody was going to get it-Chicago, Atlanta, Pittsburgh, Tulsa or whoever. ... [Largent] really thought they had played favorites, but at least it was to Tulsa's benefit."

More Than Homes

Even without the political controversies, HOPE VI is far from a guaranteed success. Drawing working families back to public housing to serve as role models might prove difficult, if only because public housing has such a bad public image. For residents without a car, transportation access at Osage Hills remains far from ideal. And despite years of targeted recruiting efforts, nagging concerns about low population density, low incomes and generalized blight have meant that the job of attracting retailers to north Tulsa is still only "20 percent complete," according to the Chamber of Commerce's Tisdale.

"The only certainty that exists is the past," Gant says. "When you've heard 30 years of rhetoric but no activity, and then all of a sudden you witness a whirlwind of concepts and projects and future development possibilities, what would you do if you were sitting in our seat? Your posture would be to believe it when you see it."

Such challenges are not unique to Osage Hills; experts say they are widespread in public housing nationwide. Moreover, some fundamental philosophical questions remain unanswered by HOPE VI-particularly what happens when officials kick out residents who aren't up to the standards of new and improved HUD housing. After all, even if Osage Hills succeeds, Tulsa will still have more than a dozen unimproved public housing sites.

When asked where undesirable residents are supposed to go, HUD officials in Tulsa expressed honest uncertainty. Even HOPE VI backers like Katz of Brookings acknowledged that that issue is among the many "enormous challenges" that HOPE VI faces. "Cuomo is pursuing, as he should, a variety of strategies," Katz says. "HOPE VI is one. Management reform is another. Empowerment zones are another. Initiatives in homeownership another. Any HUD Secretary who decides to put all his eggs in one basket is making a fundamental mistake."

Osage Hills is lucky in one significant way. Unlike many other HUD developments, Osage Hills has been blessed with a motivated and articulate resident leadership. Wilson, a 17-year court transcriptionist who moved into Osage Hills after being diagnosed with post-traumatic stress disorder, recently wrote a five-page essay about colleagues and neighbors who have managed to overcome their troubled personal histories or physical and mental disabilities by working in low-paying but responsible jobs at Osage Hills-a work-crew foreman, an on-site librarian, a laundromat manager. Not all, Wilson acknowledges, are fully recovered, including herself. In small ways, however, each has gained confidence, she says.

"HOPE VI," Wilson writes, "will provide our residents with so much more than just a brand new home to live in. It will do exactly what its name declares-give hope. HOPE VI is about people; it's not about two-by-fours, shingles and cement. HOPE VI addresses rehabilitation in a practical and productive way by restoring purpose, dignity and confidence in the wounded and hurting, people who otherwise do not have the social, educational and/or life skills needed to rebuild their lives. HOPE VI is an investment in people that will change the lives of our residents."